Block’s Indicator of Sustainable Growth

by Ray Block

The energy consultancy, New Energy Finance, in a report for the UN environment programme released its report Global Trends in Sustainable Energy Investment 2009 in the beginning of June.

Thanks to the environmental capital blog of the Wall Street Journal, I was able to download the report.

For the first time ever, investment in renewable power generation, including investment on energy efficiency, outpaced investment in traditional energy sources in calendar 2088, US$ 155 billion, compared to $110 billion for traditional energy investment in fossil fuels. The investment was in both companies and projects globally.

The difficult part of the report is the news that the world has to invest “US$500 billion a year by 2020 in renewable energy, energy efficiency, and carbon capture and storage. The annual investment task would rise to $590 billion by 2030, representing an average annual investment of 0.44 per cent of GDP between 2006 and 2030.”

It’s good news of a sort to be told that the target of investment “is not impossible to achieve.” But it does seem a difficult task all the same, even with the information that the most recent four year growth in renewable energy rising from $35 billion to $155 billion in 2008 demonstrates what can be done.

According to New Energy Finance, investment on this scale would ensure that levels of CO2 would peak by 2020, and rising global temperatures kept to a range of 2.0 to 2.4 degrees Celsius. The intention is to for carbon dioxide in the atmosphere stabilising at no higher than 445 to 490 parts per million.

In the renewable energy sector in 2008, Europe contributed $49.7 billion, up 2 per cent. In other regions, North America supplied $30.1 billion, down 8 per cent; China pumped in $15.6 billion, up 18 per cent; Brazil investment rose 76 to $10.8 billion mostly in cane based ethanol; Indian renewables reached $3.7 billion, up 12 per cent; and African investment was $1 billion.

Although investment is down in 2009, the first quarter still contributed $13.3 billion, a fall of 53 per cent compared to the same quarter in 2008.

In individual sectors, wind power was again first choice at $51.8 billion in 2008, 1 per cent lower than in 2007. The big news was the substantial rise in solar energy at $33.5 billion, a rise of 49 per cent. Biofuel investment faded in 2008 at $16.9 billion, down 9 per cent; while biomass and waste-to-energy at $7.9 billion showed a decline of 25 per cent over 2007.

The 49 per cent rise in solar energy was made up of two sectors- solar PV and concentrating solar, also known as solar thermal. Currently installations in PV (photovoltaics) is ahead, but concentrating solar is about to rise very strongly.

The global concentrating solar power (CSP) outlook 2009 prepared by IEA SolarPACES, ESTELA and Greenpeace has an outstanding vision. The report believes concentrating solar can be expected to contribute 7 per cent of power generation by 2030, and as much as one quarter of energy supply by 2050. As much as two million people world wide could be employed in CSP projects by 2050.

CSP installations provided only 436 MW of electricity by the end of 2008. New projects mostly in Spain will add another 1,000 MW by 2011. In the United States, CSP projects totalling a further 7,000 MW are under planning and development, along with another 10,000 MW in Spain. In all, 17,000 MW is expected to come online by 2017.